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APRIL SPRING INTO ACTION – NEW PAYROLL LEGISLATION TO NOTE!

APRIL SPRING INTO ACTION – NEW PAYROLL LEGISLATION TO NOTE!

AUTO ENROLMENT PENSION CONTRIBUTIONS INCREASE FROM APRIL 

With effect from 6th April, the minimum automatic enrolment (AE) contributions you must pay towards your employees’ pensions will increase. You will now need to contribute at least 2%, whilst the employee is required to contribute 3% themselves through automatic wage deductions. The government has warned that any failure to abide by these new regulations will lead to financial penalties for the organisation in question

STATUTORY PAY RATES TO INCREASE

The weekly pay rates of statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP) and shared parental pay (ShPP) will all increase from £140.98 to £145.18.

Coinciding with the new tax year, statutory sick pay (SSP) will increase from 6th April from £89.25 to £92.05 a week. The average weekly earnings limit which an employee must reach to be eligible for these statutory payments will also rise from £113 to £116 a week.

NATIONAL LIVING WAGE AND MINIMUM WAGE INCREASE

You will need to ensure you are paying your employees the new rates.

From the 01st April 2018 the Minimum Wage rates has increased as below:

  • 25+ year olds – NMW (National Living Wage) will increase from £7.50 to £7.83 per hour
  • 21 – 24 year olds – MW will increase from £7.05 to £7.38 per hour
  • 18 – 20 year olds – MW will increase from £5.60 to £5.90 per hour
  • 16 – 17 year olds – MW will increase from £4.05 to £4.20 per hour
  • Apprentice rate (for apprentices under the age of 19 or 19 and over but in the first year
    of apprenticeship) – MW will increase from £3.50 to £3.70 per hour

 

Proposed Revised Rates for Statutory Payments for 2017-18

Another new tax year is fast approaching, and the new statutory rates are proposed as follows:

  • The standard weekly rates of SMP, SAP, SPP and ShPP will increase from £139.58 to £140.98 – it is assumed this will be for payment weeks commencing on or after Sunday, 2 April 2017. The prescribed weekly rate of maternity allowance (MA) will also increase from £139.58 to £140.98.
  • The weekly rate of SSP will increase from £88.45 to £89.35 from 6 April 2017.
  • The earnings threshold, below which employees are not entitled to SMP, SAP, SPP, ShPP and SSP, will increase from £112 to £113 per week from 6 April 2017.

The rate increases reflect a 1% increase in the consumer price index (CPI) in the year to September 2016.

This will be the first time we have seen an increase since April 2015. This is because, although the rates normally increase each year in line with the CPI, a 0.1% fall in the CPI in the year to September 2015 meant that there were no rate increases in April 2016.

These rates are subject to Parliamentary approval, so changes are possible, but unlikely.